LIVERPOOL CITY REGION DEVOLUTION AGREEMENT

Transcription

1 LIVERPOOL CITY REGION DEVOLUTION AGREEMENT 1

2 [LC... The Rt Hon George Osborne Chancellor of the Exchequer Councillor Phil Davies Chair of the Liverpool City Region Combined Authority and Leader of Wirral Metropolitan Borough Council Lord Jim O Neill The Rt Hon Greg Clark Commercial Secretary to the Treasury Secretary of State for Communities and Local Government Councillor Rob Polhill Councillor Andy Moorhead Leader of Halton Borough Council Leader of Knowsley Metropolitan Borough Council Joe Anderson Mayor of Liverpool Councillor Ian Maher Leader of Sefton Metropolitan Borough Council Councillor Barrie Grunewald Leader of St Helens Metropolitan Borough Council.. Robert Hough Chair of Liverpool City Region LEP 2

3 Contents Overview page 4 Summary table page 5 Governance page 6 Skills (19+) page 7 Skills (16-18) page 8 Employment page 9 Housing and planning page 10 Transport page 11 Innovation page 12 Business growth and support page 12 Energy and environment page 13 Culture page 14 Fiscal page 14 European Funding page 15 Under this geography page 16 Liverpool City Region Combined Authority commitments page 16 3

4 Liverpool City Region Combined Authority Devolution Agreement This document sets out the terms of a proposed agreement between the government and the leaders of the Liverpool City Region to devolve a range of powers and responsibilities to the Liverpool City Region Combined Authority and a new directly elected mayor for the city region. This Devolution Agreement marks the next step in a progressive process of devolution of funding, responsibilities and powers from central government to the Liverpool City Region. The Liverpool City Region will continue to have further devolution dialogue with the government in the future, including on health and social care integration. The devolution proposal and all levels of funding are subject to the Spending Review and ratification from the Liverpool City Region individual local authorities. This agreement is subject to the enactment of the necessary legislation (The Cities and Local Government Devolution Bill and the Buses Bill), and to parliamentary approval of the secondary legislation implementing the provisions of this agreement. Liverpool City Region has the opportunity, through devolution, to ensure it is at the heart of the Northern Powerhouse. With the River Mersey and the integrated cluster of logistics and expertise through Superport, The Liverpool City Region has unique economic assets that can help transform the Northern economy. In its growth plan, the City Region has a network key strategic sites to drive forward business growth and commercial investments including 3MG in Halton, Knowsley Industrial Park, Atlantic Park in Sefton, Parkside in St Helens, Wirral Waters and Stonebridge Cross in Liverpool. The City Region is also well positioned to be at the heart of an advanced manufacturing network across the North with the science and innovation strengths at Daresbury and Liverpool Knowledge Quarter and world class firms like Jaguar Land Rover, Getrag, Unilever, Pilkington s Ineos Chlor and Cammell Laird. This document we have negotiated together provides for the transfer of significant powers for economic development, transport, housing and planning and employment and skills which will positively impact on the lives of all of our residents and businesses. Devolution must deliver opportunities for all of those residents and businesses, through creating more jobs, improving the skills and employment prospects of our residents and allow them a greater say over the future of their communities. 4

5 Summary of the proposed devolution deal agreed by the government and the Liverpool City Region Combined Authority. A new, directly elected Liverpool City Region Mayor will act as Chair to the Liverpool City Region Combined Authority and will exercise the following powers and functions devolved from central government: Responsibility for a devolved and consolidated local transport budget, with a multiyear settlement to be agreed at the Spending Review. Responsibility for franchised bus services, which will support the Combined Authority s delivery of smart and integrated ticketing across the Combined Authority. Powers over strategic planning, including the responsibility to create a Single Statutory City Region Framework, a Mayoral Development Corporation and to develop with government a Land Commission and a Joint Assets Board for economic assets. The Liverpool City Region Mayor will be required to consult Combined Authority Members on his/her strategies and spending plans, which the Combined Authority may reject if two-thirds of the constituent council members agree to do so. The Liverpool City Region Combined Authority, working with the Liverpool City Region Mayor, will receive the following powers: Control of a 30 million a year funding allocation over 30 years, to be invested in the Liverpool City Region Single Investment Fund, to unlock the economic potential of the River Mersey and Superport as well as maximise the opportunities from HS2. Responsibility for chairing an area-based review of 16+ skills provision, the outcomes of which will be taken forward in line with the principles of the devolved arrangements, and devolved 19+ adult skills funding from 2018/19. Joint responsibility with the government to co-design employment support for the harder-to-help claimants. More effective joint working with UKTI to boost trade and investment, and responsibility to work with the government to develop and implement a devolved approach to the delivery of national business support programmes from Building on the success of International Festival for Business (IFB) 2014 and the proposals for IFB 2016, Liverpool City Region and the government, and in particular UKTI and the GREAT Britain campaign, will continue engagement to establish IFB Liverpool as a vital feature of the international business calendar in 2018 and In addition: To support the development of the Liverpool City Region, the government will offer Liverpool City Region expert advice and support to ensure they are able to put forward a City Region led proposal to undertake a Science and Innovation audit. The Liverpool City Region will engage with the government to explore options around a sustainable and viable business model for National Museums Liverpool. The government will work with the Liverpool City Region Combined Authority to agree specific funding flexibilities after the Spending Review. Further powers may be agreed over time and included in future legislation. 5

6 GOVERNANCE 1. Liverpool City Region has made significant steps to enhance its governance with the creation of the Combined Authority, backed by a vibrant Local Enterprise Partnership. The Combined Authority enables decisions on economic growth and development to be taken in an open and transparent way on behalf of the entire city region. In recognition of the success of the Combined Authority, this deal will strengthen it with further powers. There is no intention to take existing powers from local authorities without agreement. The agreement will protect the integrity of local authorities in the Liverpool City Region. 2. As part of this agreement, Liverpool City Region Combined Authority will build on this governance model by adopting a model of a directly elected city region Mayor over the Combined Authority s area with the first elections in May The directly elected Mayor for Liverpool City Region Combined Authority (LCR) will autonomously exercise new powers. The LCR Mayor will chair the Liverpool City Region Combined Authority. All Leaders within the Combined Authority will have a clear portfolio of responsibilities and will act as a supporting and advisory function on their respective policy areas on behalf of the LCR Mayor and the Combined Authority. The LCR Mayor and the Liverpool City Region Combined Authority will be scrutinised and held to account by the Liverpool City Region Combined Authority Overview and Scrutiny committee(s). The LCR Mayor will also be required to consult the Combined Authority members on his/her strategies, which it may reject if twothirds of the constituent council members agree to do so. The Combined Authority will also examine the LCR Mayor s spending plans and will be able to amend his/her plans, if two-thirds of the constituent council members agree to do so. 4. Proposals for decision by the Combined Authority may be put forward by the LCR Mayor or any Combined Authority Member. The LCR Mayor will have one vote as will other voting members. Any questions that are to be decided by the Combined Authority are to be decided by a majority of the members present and voting, subject to that majority including the vote of the LCR Mayor, unless otherwise set out in legislation, or specifically delegated through the Authority's Constitution. 5. The Liverpool City Region Mayor will also be a member of the Local Enterprise Partnership, alongside the other members of the Combined Authority, recognising the importance of the private sector in delivering Liverpool City Region s growth strategies. 6. Economic growth is a shared endeavour and is vital in delivering the Northern Powerhouse ambitions. The Mayoral Combined Authority will continue to work very closely with the government for the benefit of the public. 7. The Liverpool City Region Combined Authority and Local Enterprise Partnership will commit to work with partners across the North of England to promote opportunities for pan-northern collaboration, including Transport for the North, to drive northern productivity and build the Northern Powerhouse, which will support growth across the city region. 6

7 SKILLS AND EMPLOYMENT Skills (19+) 8. The government will enable local commissioning of outcomes to be achieved from the 19+ adult skills budget starting in academic year 2016/17; and will fully devolve budgets to the Liverpool City Region (LCR) Combined Authority from academic year 2018/19 (subject to readiness conditions). These arrangements do not cover apprenticeships. 9. Devolution will proceed in three stages, across the next three academic years: a. Starting now, the LCR Combined Authority will begin to prepare for local commissioning. It will develop a series of outcome agreements with providers about what should be delivered in return for allocations in the 2016/17 academic year. This will replace the current system of funding by qualifications as providers will receive their total 19+ skills funding as a single block allocation. This new arrangement will allow the LCR Combined Authority to agree with providers the mix and balance of provision that will be delivered in return for the block funding, and to define how success will be assessed. b. For the 2017/18 academic year, and following the area review, government will work with the LCR Combined Authority to vary the block grant allocations made to providers, within an agreed framework c. From 2018/19, there will be full devolution of funding. The LCR Combined Authority will be responsible for allocations to providers and the outcomes to be achieved, consistent with statutory entitlements. The government will not seek to second guess these decisions, but it will set proportionate requirements about outcome information to be collected in order to allow students to make informed choices. A funding formula for calculating the size of the grant to local / combined authorities will need to take into account a range of demographic, educational and labour market factors. 10. The readiness conditions for full devolution are that: a. Parliament has legislated to enable transfer to local authorities of the current statutory duties on the Secretary of State to secure appropriate facilities for further education for adults from this budget and for provision to be free in certain circumstances b. Completion of the Area Review process leading to a sustainable provider base c. After the Area Reviews are complete, agreed arrangements are in place between central government and the LCR Combined Authority to ensure that devolved funding decisions take account of the need to maintain a sustainable and financially viable 16+ provider base d. Clear principles and arrangements have been agreed between central government and the LCR Combined Authority for sharing financial risk and managing failure of 16+ providers, reflecting the balance of devolved and 7

8 national interest and protecting the taxpayer from unnecessary expenditure and liabilities e. Learner protection and minimum standards arrangements are agreed f. Funding and provider management arrangements, including securing financial assurance, are agreed in a way that minimises costs and maximises consistency and transparency. Skills (16-18) 11. The government commits to an Area Based Review of post-16 education and training, currently expected to start in April The outcomes of the Area Based Review will be taken forward in line with the principles of the devolved arrangements. The review will be chaired by the Combined Authority and will include all post-16 education and training provision in the initial analysis phase. Recommendations will be focused on General FE and Sixth Form Colleges, however the Regional Schools Commissioner and the relevant local authorities will consider any specific issues arising from the reviews for school sixth form provision. 12. To ensure continued local collaboration following the Area Based Review, the Liverpool City Region Combined Authority will work in partnership with local colleges and providers to publish a local skills strategy. This will aim to help ensure that post-16 providers are delivering the skills that local employers require. It is expected that the Combined Authority will then collaborate with colleges and providers, with appropriate support from EFA, to work towards that plan. 13. Following the Area Based Review, the government would expect the Regional Schools Commissioner to continue to engage with the Liverpool City Region Combined Authority to ensure local links and working are maintained. 14. The government will work with Liverpool City Region Combined Authority to ensure that local priorities are fed into the provision of careers advice, through direct involvement and collaboration with the government in the design of local careers and enterprise provision for all ages, including collaboration on the work of the Careers and Enterprise Company and the National Careers Service. 15. Liverpool City Region and the government will collaborate to maximise the opportunities presented by the introduction of the apprenticeship reforms (including the levy) and to work together on promoting the benefits of apprenticeships to employers. 16. Liverpool City Region will work with the government to explore ways of continuing to improve standards of education and skills and vocational training across the City Region. The Liverpool City Region Combined Authority will continue to create their own strategies on vocational education and training, to be shared in due course to the government for further discussion. 8

9 Employment 17. Liverpool City Region Combined Authority will work with DWP to co-design the future employment support, from April 2017, for harder-to-help claimants, many of whom are currently referred to the Work Programme and Work Choice. 18. The respective roles of DWP and Liverpool City Region Combined Authority in the co-design will include: a. DWP sets the funding envelope, Liverpool City Region Combined Authority can top up if they wish to, but are not required to. b. Liverpool City Region Combined Authority will set out how they will join up local public services in order to improve outcomes for this group, particularly how they will work with the Clinical Commissioning Groups/third sector and NHS England / the Work and Health Unit nationally to enable timely healthbased support. c. DWP set the high-level performance framework and will ensure the support appropriately reflects labour market issues. The primary outcomes will be to reduce unemployment and move people into sustained employment. Liverpool City Region Combined Authority will have some flexibility to determine specific local outcomes that reflect local labour market priorities, these outcomes should be complementary to the ultimate employment outcome (for example in-work wage progression). In determining the local outcome(s) Liverpool City Region Combined Authority should work with DWP to take account of the labour market evidence base and articulate how the additional outcome(s) will fit within the wider strategic and economic context and deliver value for money. d. Before delivery commences, DWP and Liverpool City Region Combined Authority will set out an agreement covering the respective roles of each party in the delivery and monitoring of the support, including a mechanism by which each party can raise and resolve any concern that arise. 19. In addition, in the event employment support for this group is delivered through a contracted-out programme, Liverpool City Region Combined Authority will cocommission the programme with DWP. The respective roles of DWP and Liverpool City Region Combined Authority will include: a. DWP sets the contracting arrangements, including contract package areas, but should consider any proposals from Liverpool City Region Combined Authority on contract package area geography. b. Liverpool City Region Combined Authority will be involved in tender evaluation. c. Providers will be solely accountable to DWP, but DWP and Liverpool City Region Combined Authority s above-mentioned agreement will include a mechanism by which Liverpool City Region Combined Authority can escalate to DWP any concerns about provider performance/breaching local agreements and require DWP to take formal contract action where appropriate. 9

10 20. In the event that alternative delivery mechanisms are put in place, comparable arrangements will be put in place. 21. Liverpool City Region will work with DWP to develop a business case for an innovative pilot to support those who are hardest to help, taking a household approach. The business case should set out the evidence to support the proposed pilot, cost and benefits and robust evaluation plans, to enable the proposal to be considered for funding at a later date, subject to Ministerial approval. HOUSING AND PLANNING 22. The Liverpool City Region Mayor will exercise strategic planning powers to help accelerate economic growth and new housing development throughout the City Region. This will include: a. Development of a Single Statutory City Region Framework supporting the delivery of strategic employment and housing sites throughout the City Region. Such a Framework would require approval by a unanimous vote of members appointed to the Combined Authority by the constituent councils. This approach must not delay the development of local plans - Local Authorities within the City Region commit to delivering local plans by early 2017, pooling resources across the city region as necessary to do so. These will support development of the single City Region Framework. b. The power to be consulted on and/or call-in planning applications of strategic importance to the City Region, subject to the consent of the relevant Combined Authority Member for the individual authority area. c. As a step towards a Statutory Framework, the City Region will commit to the identification of key economic sites for Housing and for Employment, at the City Region level, by 2017 to support a Mayoral Development Corporation approach. The City Region will also create a brownfield register to support this work. This will support the delivery of new housing and employment growth ahead of any Statutory Plan being produced. d. The creation of a Mayoral Development Corporation, which will support the delivery of key sites through Mayoral Development Zones in the Liverpool City Region. This will include the ability to undertake Compulsory Purchase Orders to aid scheme delivery. These powers will be exercised with the consent of the Authority in which the powers are being used. e. The government and the City Region will develop a Land Commission (including a Joint Assets Board for economic assets formerly held by the Regional Development Agency, with the Joint Asset Board s terms of reference being jointly agreed, as far as consistent with government priorities on public sector land and receipts targets) to support the better coordination and release of public asset disposals. This will include representation from senior government officials from relevant Departments and Non- Departmental Public Bodies. The joint approach will aim to increase the availability of sites for economic growth, housing, and improved communities. 10

11 f. Liverpool City Region and the government will continue to discuss the devolution of housing loan funds and the city regions future housing ambitions. TRANSPORT 23. A new, directly elected Liverpool City Region Mayor will exercise the following powers and functions devolved from central government: a. Responsibility for a devolved and consolidated local transport budget, including all relevant devolved highways funding, with a multi-year settlement to be agreed at the Spending Review; b. The ability to franchise bus services in the city region, subject to necessary legislation and local consultation. This will be enabled through a specific Buses Bill, to be introduced during the first Parliamentary session, which will provide for the necessary functions to be devolved. This will support the Combined Authority s ambitions in delivering its Bus Strategy and in enhancing the local bus offer. This includes the delivery of smart and integrated ticketing, working as part of Transport for the North on their plans for smart ticketing across the North. c. A Key Route Network of local roads which will be managed and maintained by the Combined Authority on behalf of the LCR Mayor, from May This will be achieved through a single asset management plan, working towards streamlined contractual and delivery arrangements across the city region. 24. In addition and as part of the deal: a. Through the Spending Review, the government will establish a long term Special Rail Grant Settlement for the Merseyrail network. This increased funding certainty will allow Merseytravel to separately progress the locallyfunded procurement of new trains for the Merseyrail network. This will replace the Merseyrail Electrics rolling stock with newer, faster trains and more capacity. b. The Liverpool City Region will bring forward alternative proposals for, in the first instance, the management of rail stations on the Merseyrail Electrics network and, subsequently, all stations in the Liverpool City Region. Potentially this may extend, in the longer-term, to wider rail infrastructure assets in the city region. If any of these proposals would lead to the transfer of any rail station or infrastructure assets to the Combined Authority, the Combined Authority with Rail North, will be obliged to bring forward a business case for consideration by the government. c. The Department for Transport will continue to work with the Liverpool City Region in the review of the tolls on the Mersey Tunnels being undertaken by the Combined Authority, which considers the options open to the Authority to reduce the cost of tunnel tolls and its impact on infrastructure and the ability to accelerate economic growth. 11

12 d. The government recognises and supports the Liverpool City Region s crucial role in delivering the Northern Powerhouse and associated Transport for the North work-streams. Through this formal partnership, the city region will present to government details of transformational schemes, including significantly improving the capacity of Liverpool Lime Street and associated redevelopment of the station and its surroundings to serve as a major transport hub to support the TransNorth rail enhancement programme, as well as options for strategic road investment and plans for smart ticketing across the North of England. INNOVATION 25. The government supports the vision for innovation set out in the Liverpool City Region Local Enterprise Partnerships Innovation Plan and recognises the importance of the delivery of this vision for the City region s future economic growth. 26. To support this, the government will offer Liverpool City Region a dedicated Smart Specialisation Advisory Hub workshop in Liverpool, offering expert advice and support to ensure that they are actively engaged in the forthcoming Science and Innovation audit process. 27. The Liverpool City Region s ambition is to work with others in the North West, to be at the heart of a collaboration of sufficient scale and ambition to develop internationally significant excellence and capacity, able to compete globally. 28. Through this process, the Liverpool City Region will aim to establish a robust case that ensures its innovation assets are recognised in UK context and beyond. BUSINESS GROWTH AND SUPPORT 29. The government will take steps to devolve control and responsibility for business support to Liverpool City Region to enable it to provide a fully integrated service to its local businesses. 30. Working within the scope of existing contracts, the government will work with Liverpool City Region to align the Business Growth Service with local business support through Liverpool City Region s Growth Hub. This will include co-location of services, joint referrals, marketing and evaluation. 31. The government will work with the Liverpool City Region to develop and implement a devolved approach to the delivery of business support from April 2017 onwards, subject to the outcomes of the Spending Review. 32. The Liverpool City Region may receive additional Enterprise Zones, subject to the current bidding round for further Enterprise Zones. 33. The government will ring-fence trade services resource within Liverpool City Region and explore options for potentially integrating it with the Liverpool City Region Growth Hub to form a single trade service for businesses. Liverpool City Region and UKTI will agree an export plan for the City Region with a dual key approach to activities and reporting on outputs and outcomes. Ring fenced resource remains subject to departmental budget changes. 12

13 34. Building on the success of International Festival for Business (IFB) 2014 and the proposals for IFB 2016, Liverpool City Region and the government, and in particular UKTI and the GREAT Britain campaign, will continue engagement to establish IFB Liverpool as a vital feature of the international business calendar in 2018 and The government and the Combined Authority will work together on the delivery of inward investment into the region. UKTI will agree joint objectives for a strengthened locally-delivered service to attract inward investment and will participate in a quarterly board to track progress. The government will consider the case for creating a Northern Powerhouse hub for foreign investment in discussion with key partners in the region. This approach will be focused on maximising highlevel jobs and long-term economic impact. 36. HMRC, as the UK customs authority, is committed to supporting economic growth through the provision of efficient, simple and transparent customs facilitations and procedures to existing and new customers. HMRC commits to extending its existing policy of custom warehousing and other reliefs to any goods that are imported and then manufactured and/or assembled in Liverpool City Region before export subject to the applicants meeting the necessary conditions outlined in the various customs notices. To deliver this, HMRC will agree to consider approving reliefs such as custom warehouses on this basis as and when businesses operating in the city region apply for this facility. ENERGY AND ENVRONMENT 37. The River Mersey has undergone the greatest clean-up of any river in Europe over the last thirty years. Through the commitment of local stakeholders, the transformation in environmental performance has been internationally recognised and this means the river is once again a great asset for tourism and trade. To further develop this key asset, Liverpool City Region will commit to the cleanest river standard by 2030 and commit to a discharge free Mersey by A next step in the river's recent evolution could be to harness its huge tidal range to produce power for the City Region's businesses and citizens. Technology is in development that could deploy a large tidal energy system into the river that could have the potential to produce significant volumes of clean and predictable energy well into the next century. 39. The Liverpool City Region estuary has one of the largest tidal ranges in the UK and the Liverpool City Region considers it to be one of the best locations in the UK for a tidal power scheme. The government recognises that the River Mersey and Liverpool Bay area is a key asset that has the potential to drive growth within the Northern Powerhouse and the government commits to supporting Liverpool City Region by providing guidance to support Liverpool City Region s development of a costeffective tidal power scheme proposal for the River Mersey or Liverpool Bay that could generate low carbon energy for businesses and consumers. 40. Once an economic and environmental case is made, the government will consider the Liverpool City Region scheme on its merits. Liverpool City Region will continue to explore options to make the development more cost effective and deliverable, 13

14 principally through expedited planning processes and direct local use of the power generated. 41. DECC and Ofgem commit to explore further Liverpool City Region s proposals on how innovation and collaboration can enable a more coordinated approach to network investment in order to meet growing network demands. To deliver this, Ofgem commit to considering proposals put forward by the Liverpool City Region and the DNO as part of the Quicker and More Efficient Connections project. 42. DECC commits to work with Liverpool City Region on the design of future home energy efficiency programmes, including ways to make delivery mechanisms more efficient and effective. CULTURE 43. Recognising Liverpool City Region s plans to place Culture and Creativity at the heart of its strategy to accelerate economic growth, improve skills and further develop its distinctive visitor offer, the government will work with Liverpool City Region to support a place-based strategy and the city region's plans for a Local Cultural Partnership (LCP). 44. The Liverpool City Region will engage with the government to explore options around a sustainable and viable business model for National Museums Liverpool by the end of this financial year. This will ensure that National Museums Liverpool continues to make a strong and sustainable contribution to the city region s cultural infrastructure and visitor economy offer. Any future National Museums Liverpool change of business model will remain subject to Ministerial approval. 45. The government notes that Liverpool city region will work to realise Liverpool s ambition to develop a National Migration Museum to reflect its international heritage and contemporary future. 46. Being a European Capital of Culture or a UK City of Culture is transformational. Recognising Liverpool s status as the UK s European Capital of Culture 2008 and the work undertaken to harness that legacy, the government welcomes Liverpool s move to develop this legacy further and share its learning. FISCAL 47. Liverpool City Region will create a Single Investment Fund (SIF) that draws together city region and agreed national funding streams to deliver an ambitious investment programme across the city region to unlock the economic potential of the River Mersey and Superport as well as maximise the opportunities from HS2. Liverpool City Region commits to capitalising the SIF and prioritising investment based on economic impact. To support this investment approach, the government agrees to allocate an additional 30m per annum of funding for 30 years (75% capital and 25% revenue), which will form part of and capitalise the Liverpool City Region Combined Authority single pot. The fund will be subject to 5-yearly gateway assessments. 14

15 48. The government will work with the Liverpool City Region Combined Authority to agree specific funding flexibilities. The joint ambition will be to give Liverpool City Region Combined Authority a single pot to invest in its economic growth. This pot will comprise a flexible, multi-year settlement providing the freedom to deliver its growth priorities, including the ability to re-direct funding to reflect changing priorities, whilst upholding their statutory duties. This local freedom will be over a range of budgets to be determined by Liverpool City Region Combined Authority and the government after the Spending Review, including as requested the Regional Growth Fund or its equivalent successor. The Combined Authority will have the flexibility to secure substantial private and public sector leverage. The Combined Authority will also be able to use capital receipts from asset sales as revenue funding for public service transformational initiatives. The government expects to disburse this agreed settlement to the Liverpool City Region annually in advance. 49. The Cities and Local Government Devolution Bill currently in Parliament makes provision which will govern prudential borrowing for Combined Authorities. Following Royal Assent, the government will work with the Combined Authority to determine how these powers could apply within a framework of fiscal responsibility and accountability to the Combined Authority and local authorities. 50. Given the recently announced business rate reforms announced by the Chancellor, the government commits to discuss the business rates appeals system and general appeals process with the Liverpool City Region to help ensure the Liverpool City Region is prepared for ongoing developments within the Business Rates system. Liverpool City Region will continue to discuss with the government the proposed business rate reforms and how it will affect the city region. 51. The government will give the Liverpool City Region Mayor the power to place a supplement on business rates to fund infrastructure, with the agreement of the local business community through the local enterprise partnership, up to a cap. EUROPEAN FUNDING 52. European Funds have played a significant role in the economic development and growth of Liverpool City Region over the last twenty years. Through devolution, the City Region is seeking greater influence and decision making in respect of the 220.9m European Regional Development Funds (ERDF) and European Social Funds (ESF) in Liverpool City Region. This will allow the City Region to integrate and align investments with other aspects of the devolution deal and local economic priorities, to improve performance and maximise economic impact. 53. In order to deliver these objectives, Liverpool City Region is seeking Intermediate Body status for ERDF and ESF funding by April 2016 or as soon as possible thereafter. This would give the City Region powers to select ERDF and ESF projects on the basis of strategic fit with Operational Programmes and local conditions. 54. The Department for Communities and Local Government and the Department for Work and Pensions, the Managing Authorities for ERDF and ESF respectively, will retain the responsibility to make sure that proposals comply with European Union Regulations. Both Managing Authorities will therefore retain responsibility for 15

16 project selection in relation to eligibility checks as well as all other Managing Authority functions. 55. It is envisaged that the Liverpool City Region Combined Authority will act as the Intermediate Body. The agreement between each Managing Authority and the Intermediate Body will be set out in writing. Each written agreement will contain details of delegated responsibilities and accountabilities, performance arrangements, resources, their funding and payment arrangements and other relevant details. UNDER THIS GEOGRAPHY: 56. The Mayor for the Liverpool City Region will be elected by the local government electors for the areas of the constituent councils of the Liverpool City Region Combined Authority. The LCR Mayor and Liverpool City Region Combined Authority will exercise the powers and responsibilities described in this document in relation to its area, i.e. the area of the constituent councils of the Liverpool City Region Combined Authority. 57. Additional funding or budgets that are devolved as a result of this agreement will go to the Liverpool City Region Combined Authority, to be exercised by the LCR Mayor or Combined Authority as set out in this document. 58. The Liverpool City Region Combined Authority must exercise functions in relation to its geographical area. 59. Under the LCR Mayor model, it is not expected that the role of the LEP or private sector be lessened. LIVERPOOL CITY REGION COMBINED AUTHORITY COMMITMENTS 60. The Liverpool City Region Combined Authority is accountable to local people for the successful implementation of the devolution deal; consequently, the government expects Liverpool City Region to monitor and evaluate their deal in order to demonstrate and report on progress. The Cities and Local Growth Unit will work with the Liverpool City Region to agree a monitoring and evaluation framework that meets local needs and helps to support future learning. 61. The Liverpool City Region will be required to evaluate the additional 30m per annum of funding for 30 years, which will form part of and capitalise the Liverpool City Region Combined Authority single pot. The 30m per annum fund will be subject to: a. Gateway assessments for the 30m per annum scheme. Liverpool City Region and HM Treasury will jointly commission an independent assessment of the economic benefits and economic impact of the investments made under the scheme, including whether the projects have been delivered on time and to budget. This assessment will be funded by Liverpool City Region, but agreed at the outset with HM Treasury, and will take place every five years. The next five year tranche of funding will be unlocked if HM Treasury is satisfied that the independent assessment shows the investment to have met the objectives and contributed to national growth; 16

17 b. The gateway assessment should be consistent with the HM Treasury Green Book, which sets out the framework for evaluation of all policies and programmes, and where relevant with the more detailed transport costbenefit analysis guidance issued by the Department for Transport (DfT). The assessment should also take into account the latest developments in economic evaluation methodology; and c. The government would expect the assessment to show the activity funded through the scheme represents better value for money than comparable projects, defined in terms of a Benefit to Cost ratio. 62. Liverpool City Region Combined Authority will work with the government to develop a full implementation plan, covering each policy agreed in this deal, to be completed ahead of implementation. This plan will include the timing and proposed approach for monitoring and evaluation of each policy and should be approved by the DCLG Accounting Officer. 63. The Liverpool City Region Combined Authority will continue to set out their proposals to the government for how local resources and funding will be pooled across the city region. 64. The Liverpool City Region Combined Authority will agree overall borrowing limits and capitalisation limits with the government and have formal agreement to engage on forecasting. Liverpool City Region Combined Authority will also provide information, explanation and assistance to the Office for Budget Responsibility where such information would assist in meeting their duty to produce economic and fiscal forecasts for the UK economy. 65. The Liverpool City Region Combined Authority will agree a process to manage local financial risk relevant to these proposals and will jointly develop written agreements with the government on every devolved power or fund to agree accountability between local and national bodies on the basis of the principles set out in this document. 66. The Liverpool City Region Combined Authority will continue to progress programmes of transformation amongst authorities to streamline back office functions and share more services and data, including on assets and property. 67. The Liverpool City Region Combined Authority will continue to adhere to their public sector equality duties, for both existing and newly devolved responsibilities. 17